Online phone calls are now becoming the cheaper alternative to standard telephone systems. We explain how it works and look at the services on offer

Cliff Joseph, Computeract!ve 24 Nov 2005

PC users have long been able to make free calls through instant messaging services such as MSN Messenger and Yahoo Messenger, but many were dissuaded by the idea of having to buy and wear a headset and the inconvenience of having to make sure that friends and family were online when they fancied a natter.

Well, things have changed since we last wrote about making telephone calls using a broadband connection. A number of services now enable you to use a proper telephone handset to make cheap or free calls by placing an adapter between the broadband modem or router and a standard telephone.

This growing industry is known as internet telephony, and it offers consumers substantial savings over traditional phone networks, as well as added features such as voicemail, and a means to get in touch with non-PC-owning acquaintances.

You may see it referred to in shops and advertisements as 'VoIP', which stands for Voice over Internet Protocol, the technology used to transform an internet connection into a cheaper way of using a standard phone line.

So why is it cheaper to make a phone call using the internet? After all, the same wire is used to carry the signal. The answer is in the way the line is used. When you dial a number using a normal household phone, the telephone systems set up at lightening speed a direct connection between the two handsets.

That specific set of links between the two use the copper line to the exchange, then a small part of the main UK-wide telephone network. That link is physically maintained for the duration of the call and can't be used by other customers.

When making a call via the internet down the same telephone line, it is first chopped up into tiny elements called packets, each of which contains the data of a tiny part of the sound of your voice. These packets are then sent down the line to the next router on the internet.

Routers, which are spread throughout the internet in places such as the headquarters of ISPs, are like the traffic police of the internet, telling packets of data the best way to get to their destination. Not every packet will take the same route depending on how much traffic there is on a line between routers.

The upshot is that the same network cable in the telephone system can be used by thousands of different users at the same time, making it cheaper and more efficient.

If you're confused about how a broadband service can be accessed without using a computer, here's how it works. The adapters supplied by the likes of Vonage and Freetalk convert your voice into data in the same way that a PC would if you were using Skype or an instant messaging program. Then it is fed into the broadband router or modem and sent on its way.

With all the new services, tariffs can be quite confusing, so here's our guide to the best value internet telephony services and how to choose the one that's most suitable for your needs.